What Exactly is Medicaid?

Medicaid Funding Fast Facts

1. Medicaid covers nearly 80 M people.
2. It’s an entitlement, meaning it covers the actual amount spent on care.
3. There is no maximum amount.
4. Its cost is divided between states and the federal government. Each states pay a different portion, depending on a formula (FMAP).

Medicaid & Disability/Aging Fast Facts

• Over 6 million adults receive Medicaid-funded LTSS. (Community Living Equity Center)
• Medicaid is the primary payer of LTSS, this is particularly true for HCBS.
• In 2020, 6% of Medicaid enrolled use LTSS, but those enrolled made up 37% of Medicaid expenditures. (KFF)

Medicaid Funding

• Medicaid is the largest source of federal funding for states and make up one-third of most state budgets.
• Medicaid is an entitlement, meaning it covers the actual amount spent on care and states are required to provide many Medicaid services to those eligible.
• There is no maximum amount that people or states can spend.
• The cost is divided between states and the federal government. Each states pay a different portion, depending on a formula, called FMAP.

Why Medicaid Matters Nationally

Nearly 80 Million people rely on Medicaid

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Over 11 million people with disabilities rely on it for health care services and to live independently.

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It is MUCH more than a health care program, Medicaid is the main funder for LONG-TERM SERVICES AND SUPPORTS (LTSS) including HOME AND COMMUNITY BASED SERVICES (HCBS).

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People with disabilities have a larger stake in the fight because of the cost of HCBS vs. acute health care

Medicaid is a lifeline for older adults and disabled people, including who need care.

Medicaid is more than a health care program – It’s the primary payer for home and community-based services (HCBS) which supports older adults and disabled people to live and age with dignity.

1. Medicare and private insurance mostly do not cover long-term care.
2. 7.8 million people rely on Medicaid for aging and disability care in homes and communities.
3. 6% of Medicaid enrollees use long-term care, but those enrollees make up 34% of Medicaid spending.

Medicaid continues to finance the majority of long-term services and supports.

Note: KFF defines LTSS to include spending for residential care facilities, nursing homes, home health services, and HCBS waivers from any of the following sources: Medicaid, individuals, the Children’s Health Insurance Program, the Indian Health Services, the Substance Abuse and Mental Health Services Administration, the Veterans Health Administration, general assistance, other federal programs, other state and local programs, school health, and other private revenues.

SOURCE: KFF estimates based on 2018 National Health Expenditure Accounts data from CMS, Office of the Actuary.

Medicaid’s Current Structure

• Federal Government and states share actual costs of coverage

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• Agree in each state on who is eligible and what services and supports are provided

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• Feds pay on average 63%

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• Different matching rates by state (50-75%)

State and Federal Partnership

Because Medicaid is a Federal-State Partnership, the Federal Government makes a basic set of rules and states can decide what else they want to cover as part of Medicaid. This creates some Mandatory services (required by the Feds) and some Optional services (the state has chosen to cover these):

Mandatory Services

Most “traditional” health care services Prescription drugs

Nursing Home Services and other Institutional Services*

Match guaranteed to states (thanks to advocacy in 2017)

Optional Services

Home and Community Based Services:

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EXAMPLES OF OPTIONAL, Mandatory SERVICES

Optional

HCBS

Dental Care

Physical Therapy

Chiropractor

RX Glasses

Dentures

Private Duty Nursing

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Mandatory

Nursing Homes

Primary Care

Lab Tests

X rays

Transit

FQHC

Family Planning

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What are Home and Community Based Services?

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IN THE HOME

Help cooking

Help with medications Assistance with self care Budgeting

Socializing

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ON THE JOB AND IN THE COMMUNITY

Job coaching Community volunteering Day programs

Impact of Cuts on PWDs and Older Adults

All roads lead to same outcome: severe cuts to federal Medicaid funding.

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Federal cuts force states to fill massive budget holes.

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States can close these holes by:

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1. cutting optional benefits (HCBS!)
2. cutting provider rates (Workforce shortage!)
3. cutting enrollment (Waitlists! Stricter eligibility! Loss of coverage due to red tape!)

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*There is no way to carve out or “shield” older adults and people with disabilities from harm.*

Impact of H.R. 1 and The Federal Context

1. Over $1 trillion in federal cuts enacted in 2025 affecting Medicaid, Medicare, the Affordable Care, SNAP, and other programs

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• Costs shifted to states, families, and providers

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• Implementation decisions are now largely in state hands.

Medicaid Cuts Threaten Care Across the Lifespan

1. Covers nearly 80 million people

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• Covers 2 in 5 children

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• Covers more than 40 percent of births

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• Primary funder of home and community-based services

Caregivers and the Workforce are Directly Impacted

1. Medicaid funds the majority of direct care worker wages

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• 37% of direct care workers rely on Medicaid for their own coverage

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• At least 13% of family caregivers rely on Medicaid

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• Families caregivers already spending over 25% of their income on caregiving related expenses

Real Impacts Already Emerging

1. States required to balance budgets

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• Medicaid dollars makes up about one-third of state budgets

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• Provider closures, especially rural hospitals at risk

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• States proposing or advancing HCBS reductions.

State-Level Public Education is Making a Difference

1. Prevention of waiver cuts in Nebraska

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• Work requirement delays in Florida

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• Reversal of family caregiver caps in Colorado

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• Medicaid trust fund creation in New Mexico

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• Revenue measures in Michigan

Opportunities for Advocates and Legal Professionals to Engage

1. Educating legislators and staff

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• Providing written and oral testimony

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• Monitoring new administrative procedures, work requirements, eligibility verifications, use of exemptions

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• Documenting denial and termination data

Preventing Harms for People Who Give and Receive Care Now + Long-Term Vision

• Prevent unnecessary harm now

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• Monitor state roll out of HR1. closely

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• Explore progressive revenue options

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• Engage broader public in care reforms

A Defining Choice for States

State policymakers face a defining choice:

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1. Reduce life-sustaining care to close budget gaps
2. Or raise Revenue-Taxes and protect access to care

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Families need stability and investment, Not deeper erosion.